Massive Chinese semiconductor constitution site stands idle

Wuhan Hongxin Semiconductor Manufacturing Company (HSMC), has been in the news quite frequently in the passed months. The company has been linked to Beijing’s move to prioritise self-sufficiency in key technologies, and the company has also been reported to have hired quite the number of engineers and managers from rival TSMC. HSMC is a young company established in late 2017, and headquartered in the Airport Economic and Technological Development Zone, Dongxihu District, Wuhan, China. And according to its website the company adheres to the concept of “serving the country with ‘core’ and realizing the dream of China” and “aiming at the goal of highly independent advanced wafer and packaging manufacturing technology”. In order to reach this the Wuhan Hongxin Project, a USD 20 billion project that – according to the company – consist of a 14 nanometer logic process production line with a total capacity of 30000 pieces per month. An unspecified logic process production line with a total capacity of 30000 pieces per month as well as a wafer level advanced packaging production line. According to the project schedule on the company’s website, the construction of the first phase of the plant was under way in March 2019 and the main building structure had been completed. However, according to a report from South China Morning Post, that is where it ended. As stated by the paper, two years after the construction started the project is now at a stand-still, with little evidence of progress. The project reportedly stalled due to being underfunded, SCMP reports citing the local Dongxihu district government. HSMC’s phase one factory – containing its main production facility and R&D building – is a massive 390’000 square metre building, but has only been partially completed due to the lack of capital. Construction of the second phase facility has barely stated; and it is unable to apply for central government funding due to insufficient preparations, the report continues. The funding issues arised last year when a Wuhan court put a three-year hold on the company use of 220’000 square metres of land which was planned for its second phase project. This was later followed by a complaint by a construction firm stating that was owed millions of RMB for the first construction phase. This was however not the only contractor that is displeased with HSMC. L&K Engineering, who assisted the company in building dust-free rooms and mechanical systems for the facility, halted all work due to delayed payments from HSMC, which hurt the contractors bottom line. The semiconductor manufacturer was given a RMB 200 million (USD 29 million) ivestment from the Dongxihu district government – however, HSMC has not fulfilled its commitment to inject RMD 1.8 billion (USD 261 million) into the project, the report continues. At the end of last year, the company made some noice to celebrate that it had acquired its first piece of semiconductor manufacturing equipment from Dutch firm ASML and also put up the new machine as collateral to borrow more than RMB 500 million from a local bank. A visit was made to the construction site by the South China Morning Post, and according tot he paper there were dozens of vehicles parked outside, but a gatekeeper said there had been no new construction this year.